THE EVOLUTION OF MANAGEMENT THINKING

Fundamentals of Management

Overview

Careful study of the historical patterns of management helps us to understand the circumstances of change and the implication of change. At the same time, we are in a better position by analyzing the past approaches to management to improve and create new perspectives that will advance the management of organizations.

Objectives

At the end of the lesson, students should be able to:1. identify and explain the major

developments in the history of management thought.

2. Understand how the historical forces influence the practice of management.

3. Describe the major components of the various management perspectives.

The classical perspective of management is divided into three sub fields, each with a different focus:

1. Scientific management

2. Bureaucratic organizations

3. Administrative principles

What is meant by the classical perspective of management

Scientific management

Frederick Taylor (1856-1915)

The theory of scientific management developed by Frederick Taylor . The perspective of management focused on two important aspects :1. Improving labour productivity

through scientific changes.2. Adopting management

practices that are based on fact and not guesswork

Scientific management

Taylor was able to set standards, increased productivity, and used incentives as rewards.

Other important contributions to the theory of scientific management: Henri Gantt, who developed the Gantt

chart to measure planned and completed work;

Frank and Lillian Gilbreath who pioneered time and motion studies – indentifying and measuring a worker’s physical movements when performing a task and analyzing the results.

Scientific management Features of scientific management:

develops standards for a job, selects workers with appropriate abilities, trains workers, and provides wage incentives

Current uses: Assist human resource personnel in analyzing job

tasks to achieve maximum productivity in the workplace.

The use of money as an incentive to boost productivity.

Highlights the importance of employee selection and training to increase productivity.

Scientific management

•Application in the real world• KFC designed employees’

workstations so that employees would not need to take more that too steps to get what they need to achieve an average service time of 90 seconds

Bureaucratic Organizations

Max Weber (1864-1920)

The bureaucratic organizations perspective is a systematic approach conceptualized by Max Weber and used in Europe as a blueprint for the operation of an entire organization. 7 desirable characteristics of a bureaucratic organization:

1. Rules – formal guidelines for behaviour of employees and written records for continuity.

2. Employee selection and advancement must be based on competence and technical qualifications.

3. Clear division of labour and definitions of authority and responsibility.

4. Positions are organized in a hierarchy, with each position under the authority of the higher one.

5. Management separate from the ownership of the

Bureaucratic organizations Summary

Weber’s organization of bureaucracy : division of labour, hierarchy, rules and procedures, written decisions, promotion based on qualifications, and separation of management and ownership.

Weber believed that an organization exhibiting these features would be more efficient and adaptable to change, for him, such systems would maintain continuity.

Bureaucratic features are dominant in the operations of many government today.

Administrative management

This set of principles focuses on managers and the functions they perform. This approach is closely identified with Henri Fayol.

Henri Fayol (1856-1915

•Fayol was the first to recognized that successful managers had to understand the basic management function, which he identified as:• Planning• Organizing• Commanding (leading)• Coordinating• Controlling

Administrative management

Fayol contended that for managers to be successful they need to apply certain principles to their management functions.

He proposed 14 principles of management.

Administrative management

Principles of management:1. Division of labour – by dividing work into

smaller elements and assigning specific elements to workers, the work can be performed more efficiently and more productively.

2. Authority and responsibility – Managers must have authority to give orders so that work can be accomplished.

3. Discipline – disciple was needed to ensure smooth operation of the business and respect for the rules.

Administrative management

4. Unity of Command – each employee should receive orders from only one manager.

5. Subordination of individual interests to the common good - the goals of the organization should take precedence over the interests of individual employees.

6. Unity of direction – Similar activities in an organization should be grouped together under one manager.

7. Remuneration of personnel – financial compensation should be fair both to the individual employee and the organization.

Administrative management

8. Centralization – power and authority should be concentrated at the upper levels of management. With managers maintaining final responsibility.

9. Scalar chain – A single, uninterrupted chain of authority should extend from the top level to the lowest level of the organization

10.Order – materials should be in the right place at the right time, and workers should be assigned job best suited for them.

Administrative management

11.Equity – managers should display friendliness and fairness to all.

12.Stability of personnel tenure – high rates of employee turnover are inefficient and should be avoided.

13.Initiative – employees should be given the freedom to take initiative in carrying out their work.

14.Esprit de corps – team spirit and harmony should be promoted among all workers to create a sense of organizational unity.

Behavioural perspective

The behavioural perspective arose during the early decades of the 20th century when the industrialized countries were experiencing many social and cultural changes.

This perspective of management can be divided into two sub-fields:I. Human relations perspective II. Human resources perspective

Human relations perspective Hawthorne Studies began in 1924 ( lead

researcher, Elton Mayo) Findings:

1. Productivity increases as a result of human behaviour phenomenon and not a cause of any physical event. The experiments revealed that when workers in groups perceived that special attention was paid to them, productivity increased.

2. Factors not specific to management may directly influence productivity and job satisfaction.

Elton Mayo

Behavioural perspective Human resource perspective – jobs should be designated to

meet higher-level needs by allowing workers to use their full potential. Douglas McGregor – developed Theory X and Theory Y, a

theory of two contrasting views of how managers view their subordinates.

Factors Theory X Theory Y

Employees attitude Employees dislike work and will avoid if it at all possible

Employees enjoy work and will actively seek it.

Management reaction

Employees must be directed, coerced, controlled, or threatened to get them put for the adequate effort.

Employees are self-motivated and self-directed towards achieving organizational goals

Employee view Employees avoid responsibility and prefer to be directed

Employees seek responsibility and wish to use their creativity in performing their jobs

Management style Authoritarian Participatory

Behavioural perspective

Chester Bernard focused on top-level management, the executives. He felt that executives must established and maintain communication systems among employees . He also regarded organizations and social systems that required employee cooperation and continuous communications.

Executives were responsible formulating objectives and purpose of the organization, as well as motivating employees.

Chester Bernard

Quantitative perspective

Quantitative perspective (management science approach) is characterized by the use of mathematics, statistics, and other quantitative techniques for management decisions-making and problem solving

Quantitative perspective

4 basic features of the quantitative approach:1. Decision-making focus - the focus of

the quantitative approach is on problems situations that require some direct action on the part of management.

2. Measurable criteria – to make a rational selection, the alternatives must be compared on the basis of some measurable criterion e.g. objective, cost, return on investment, or output rate

Quantitative perspective

3. Quantitative model – Quantitative modes such as equations and formulas are used to examine relationships.

4. Computers – using computers in problem-solving for extreme complex quantitative formulations.

Systems perspective Systems analysis – an approach to

problem solving that attacks complex systems by breaking them down into their constituent elements.

Organizational system

•Raw materials•Information•Human resources•Financial resources

The transformation

system

• Employee satisfaction• Products/

services• Profit / losses

Environment

Environment

feedback

inputs outputs

Contingency view

Perspective of management proposing that the best managerial approach is contingent on key variables in a given situation.

This view tells us that what works in one setting might not work in another.

Management job is to search for important contingencies by identifying patterns and characteristics of the organization that can fit solution to those characteristics.